Friday, May 17, 2024


by Hideo Nakamura

Volume in Cryptocurrency Trading

Volume is an important indicator used by traders to assess the liquidity, trend strength and potential trading opportunities in a particular cryptocurrency. Volume refers to the amount of trades that occur within a certain period of time, typically measured on an hourly or daily basis. In general, high volume indicates significant market interest in a given coin while low volume is indicative of low levels of activity and interest.

High trading volumes are generally seen as positive for any asset class due to the increased buying pressure which can lead to higher prices. Conversely, low volumes indicate lack of demand which may cause prices to drop. For this reason it’s important for traders to monitor cryptocurrency trading volumes when making decisions about their investments. When evaluating whether or not to enter into a trade, investors should look at both the current and historical trends in order get an idea of how much liquidity exists within that particular crypto asset or currency pair they are considering trading with.

Additionally, rising volumes may also be suggestive of upcoming news events such as new partnerships being formed or product launches that could increase awareness and thus drive up demand for coins traded on exchanges like Binance or Coinbase Pro (formerly GDAX). As such it’s wise for investors who want-in on these types of moves early on – before more mainstream exposure occurs –to keep track of volume changes over time so they can make informed decisions about when might be best time buy/sell specific cryptocurrencies ahead major price movements.

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